NEW YORK (TheStreet) -- Crude oil prices were being crushed again on Friday as jobs growth fueled a rally in the U.S. dollar. But stocks appeared to be shaking off the drop in commodity prices yet again.
Since a mid-summer high, West Texas Intermediate crude has plummeted nearly 40% to below $66 a barrel, even as the S&P 500 climbed more than 7% over the same period.
"The broader market has shaken off this oil [decline]," said Schaeffer's Investment Research's Todd Salamone in a call. "Unlike like 2008 when the plunge in oil was demand-side driven, this is partly supply-side driven. There is a difference in that this might not necessarily be indicative of a tremendous slowdown in the U.S ... the markets are saying is this could be beneficial not detrimental."
There certainly have been winners and losers -- such as airlines and oil companies -- as oil prices have declined. West Texas Intermediate crude fell nearly 1%, recovering slightly from a five-year low on Friday. Exxon Mobil (XOM) - Get Report fell 0.49%, Chevron (CVX) - Get Report tumbled 1% and BP (BP) - Get Report slipped 0.94%. The Energy Select Sector ETF (XLE) - Get Report slid 1.1%.
Better-than-expected jobs numbers pushed oil lower after the dollar surged. The U.S. dollar soared to a five-year high against a basket of currencies.
"We have a stronger dollar on that employment number," said Salamone. "With a stronger dollar, that has been bearish for commodities because oil is denominated in dollars so that makes it more expensive for foreigners to buy."
The November jobs number came in at a three-year high with 321,000 jobs added to payrolls, the Labor Department said Friday. That far exceeded estimates of a gain of 230,000 jobs and came in higher than October's 214,000 total. The unemployment rate remained at 5.8%, as expected.
For the moment, optimism has eclipsed concerns that the unparalleled strength in the job market might push the Federal Reserve to raise rates sooner. The Dow Jones Industrial Average rose 0.33%, setting fresh record levels and only points from the 18,000 mark. The S&P 500 climbed 0.15% and the Nasdaq jumped 0.22%.
"Everybody takes [the news] as a negative as much as a positive," said Brian Needleman, founder of Cornerstone Financial Partners, a firm which manages $950 million in assets. "People think it's great because it adds confidence to the market but the market itself basically sees it as a signal to the Fed to act and become more conservative in their forecasts as far as raising rates."
But the Fed likely won't be persuaded from just one robust report. "The Fed is not going to raise rates unless they see wages continuing to rise," said Prudential Financial market strategist Quincy Krosby in a call. "It's not going to be one report. They're going to want to see a series of it to make certain it's a trend, not a one-off."
Among individual movers, Yahoo! (YHOO) was gaining 1.3% following an upgrade to "buy" from Bank of America. Analyst Justin Post said the rating change was "based on Alibaba (BABA) - Get Report and tax upside potential." On the flipside, Post downgradedGoogle (GOOGL) - Get Report to "hold" on increasing competition from Apple (AAPL) - Get Report and Facebook (FB) - Get Report . Shares slid 2.3%.
Beauty supplies store Ulta Salon (ULTA) - Get Report popped 3.2% as quarterly revenue surged more than 20%, while American Eagle Outfitters (AEO) - Get Report declined 13.6% after guiding for below-consensus earnings this quarter.
-- Written by Keris Alison Lahiff in New York.